Demographics of the Rich and the Rest

This week's Economist has a special section on the global elite--"The Rich and the Rest." There are too many good demographic insights and comments for a single posting, so here is a start. How many rich people are there in the world? The consulting firm Capgemini defines anyone with "investable" assets (not including the home you live in) of at least $1 million (in US dollars) as a "high-net-worth-individual." They estimate that there are 10 million such people in the world--about one tenth of one percent of the human population. Credit Suisse has a less stringent definition of rich, calling anyone a millionaire if the sum of all net assets (value minus debt), including their house, exceeds $1 million.

The Credit Suisse “Global Wealth Report” estimates that there were 24.2m such people in mid-2010, about 0.5% of the world’s adult population. By this measure, there are more millionaires than there are Australians. They control $69.2 trillion in assets, more than a third of the global total. Some 41% of them live in the United States, 10% in Japan and 3% in China.

How did these people grow rich? Mostly through their own efforts. Only 16% of high-net-worth individuals inherited their stash, according to Capgemini. The most common way to get rich is to start a business: nearly half (47%) of the world’s wealthy people are entrepreneurs.

The global wealth pyramid has a very wide base and a sharp point. The richest 1% of adults control 43% of the world’s assets; the wealthiest 10% have 83%. The bottom 50% have only 2%. This suggests a huge disparity of influence. The wealthiest tenth control the vast bulk of the world’s capital, giving them a lot of say in funding businesses, charities and politicians. The bottom 50% control hardly any capital at all.